I have four sisters and brothers, and three have taken out loans against their share of any inheritance - significant loans, like in the $75,000 range. Dad has been tracking these loans and has provided in his will a formula for adjusting the split accordingly. However, he recently decided that these loans are to be forgiven and the estate split five equal ways.Dad hasn't asked me for any input on this decision, so I've not offered any. But I'm a little upset by it.
Although you have every right to change your will as you see fit, be sure to consider the impact those changes can have on your heirs - both financially and emotionally.
Estate planning attorneys normally advise their clients to communicate with their children about what kind of inheritance to expect and to even explain the reasons certain arrangements are being made. This approach can help eliminate the possibility that siblings will later fight with each other in court over their inheritances.
On the other hand, if the parents later decide to change their estate plans, then that can cause issues as well.
A recent column in the Washington Post, titled "Carolyn Hax: A late change to dad's will is causing resentment," is an example of just such a case.
It seems a father had planned to distribute his assets between his five children. However, three of those children had taken out loans against their inheritances. Now, the father changed his will to forgive those loans and to distribute whatever is left equally between all children. As you might expect, the siblings who did not take out a loan from the father are feeling some resentment.
A simple solution to this situation does not exist.
If you do decide to change your estate plan after telling your children about your plan, it is very important that you tell them about the changes. If they were expecting one thing and are surprised by something else after you pass away, family fights are almost guaranteed.
An experienced estate planning attorney can help you communicate your intentions, as well as provide ideas to avoid resentment over an inheritance among your children.